An acquisition, the departure of the chief executive and a takeover bid only tells the story post-period end for bookie William Hill (WMH). It's been a tumultuous few weeks, as James Henderson abruptly left the group to be replaced by interim chief Philip Bowcock – also chief financial officer for the time being. Mr Bowcock couldn't add any colour to the recent approach by rivals 888 (888) and Rank (RNK), except to say a formal offer must be on the table by 21 August.
Positive Euro 2016 results have helped reverse the torrid Cheltenham horse racing festival from March, meaning group sales nudged up during the first half. The online division (worth 34 per cent of sales) saw net revenue fall 3 per cent, but it is due to receive an investment boost soon. Its sportbook has already been redesigned to make it easier to use and an 'omni-wallet' - enabling punters to bet across sports and gaming with a single account - is due to launch in 2017. The acquisition of digital solutions company Grand Parade should also add to the group's wider digital expertise. Self exclusion - where gamblers impose restrictions on their own activity - is hurting online growth, but the number of customers doing this is shrinking.
Increased costs in its retail estate were actually a positive, argued Mr Bowcock, as they were linked to bonuses paid to staff in relation to strong trading. The division, which accounts for 57 per cent of revenue, saw net sales rise 4 per cent and gross win margins jump 1.1 percentage point to 19 per cent.
Management also announced after the results it had become the exclusive corporate bookmaker for Australian administrative sporting body Racing NSW. The deal means it is the only bookie which can stream all racing in New South Wales and the Australian Open Tennis tournament. The country is becoming a key battleground for UK groups given the popularity of gambling there.
Analysts at Goodbody expect EPS of 21.1p for the year to December 2016, compared with 24.8p in 2015.
| WILLIAM HILL (WMH) | ||||
|---|---|---|---|---|
| ORD PRICE: | 314p | MARKET VALUE: | £2.73bn | |
| TOUCH: | 313.5-314p | 12-MONTH HIGH: | 416p | LOW: 236p |
| DIVIDEND YIELD: | 4% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 140p* | NET DEBT: | 48% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 808 | 79 | 7.9 | 4.1 |
| 2016 | 814 | 101 | 9.7 | 4.1 |
| % change | +1 | +28 | +23 | - |
Ex-div: 20 Oct Payment: 2 Dec *Includes intangible assets of £1.78bn, or 205p a share | ||||
